Reliance Rights Issue & Dematerialized Rights Entitlement Trading

I also received the same mail. Can somebody explain its meaning?

Can I Apply if I have less than 15 share ?

Hi All,
As you are aware Reliance industries have initiated rights issue and they have credited some rights entitlement to my demat account A held by me with say ICICI because my existing shares of reliance are in this demat account. I don’t do much trading as such so this is acct A not linked with any broker.

Now supposed I also have a trading and demat account B with Zerodha then in order to sell them thru Zerodha can I first do an off-market transfer using delivery instruction slip from my own ICICI Bank Demat Account A to my own Zerodha demat account B?
Is such a transfer of rights issue from my own account A to my own account B allowed?

The challenge is lockdown. If I sell thru a broker and then fail to reach ICICI bank for any reasons like police not allowing, the bank closed due to sudden changes in lockdown guidelines or any such events, within T+1 to submit DIS then I will be in trouble.

And suppose such a transfer is allowed and after I bring them in my Zerodha demat and if I do not take any action until June 3rd then how Reliance will know that now they need to be withdrawn from my Zerodha demat rather than earlier ICICI bank demat?

Any clarity will be great.
Thanks in advance. Take care and stay safe.
Best regards.

@mohitmehra Can you.

You can transfer the rights entitlements from one demat account to another via an off-market transfer. If you don’t take any action, and let the REs remain in your Zerodha account, they will lapse after the issue closes.

2 Likes

Can’t see RE in Zerodha holdings.

What if someone sells his REs and then applies for right issue? What is the cross check on their end? :slight_smile:

@mohitmehra

The RTA will collect your demat account details and then check for the REs before allotment.

Hi,
I have another query… Excuse me for my lack of knowledge but I request for help. Let’s say I have received 100 Rights entitlement in my Demat and I plan to sell it off. Then I believe they will get sold at the price fixed by Reliance i.e. I guess 1257.

So a buyer will buy them on stock exchanges at 1257. However when the settlement will happen for this trade, I believe I will get the sum = 100*nil price. Which I believe is around approx 173 per share or so. That’s where I recover the cost of proposed dilution and Reliance gets the rest of the funds from those 100 share sell.
Kindly confirm if I am correct.
I used https://www.trignosource.com/finance/Nil-paid%20rights.html to check the nil paid value.

Today closing price 1442. Rights price 1257 and number of rights I believe should be 1/15 = 0.066667.
Thanks and regards.

The rights entitlement you receive in your demat account will not be sold at a fixed price. The price can be around the difference between the current market price and issue price. Whoever has the REs, will be able to subscribe to the rights shares at the issue price of Rs. 1257.

Reliance has announced dividend Of 6.5 and since my shares are pledged with Zerodha, will I still get dividend ?
Due to Zerodha’s wrong information on support I am not eligible for rights issue as my reliance shares were pledged with Zerodha
On support portal Zerodha have clearly written that you will able to enjoy corporate benefits inspite of pledging
Very disappointed

Hi Kartik, you’ll receive the RE’s from Zerodha if you’ve pledged your Reliance shares for margin. These will be credited to your account on or about May 20th.

Thanks @mohitmehra. However if I understand wouldn’t the buyer pay 1257/share from his end? What I get after settlement will be difference between market & issue price and rest should go to Reliance, else how Reliance will make money by allowing me to sell my REs?

e.g. if I sell all my 100 REs then the buyer should see that they are available for same discounted issue price of 1257, otherwise why would they buy from me? They can directly buy Reliance share at say 1440. The 2 (reliance industries and relianec industries rights issue) should have different ISINs.

I am attaching screenshot of zerodha executive itself.He says failing to unpledge stocks before the record date will lead to non entitlement of rights. Also in my entitlement offer letter from reliance it says you are eligible for 0 right shares
There is a lot of confusion due rules not being cleared and wrong information provided by zerodha on its portal, investors loose wonderful opportunities due to this mistakes

Hi Kartik, regret the confusion. As per the earlier rules, you wouldn’t have been able to apply for the rights if you didn’t unpledge your holdings. However, since the REs can be credited to your demat account, you need not unpledge.

Hi, please clear my doubt regarding trading of RE.
The zerodha circular says that trading period of RE is from 20th May to 29th May and if no action is taken from my side then RE will lapse.
I have 10 RE credited to my account. Now since it’s a right issue and I’ve the option of applying additional shares, what happens if I apply for let’s say 20 rights shares through ASBA (payment for which will be deducted in June), will my previous RE will lapse and I won’t get any shares ??

Hi

In RTA website still the UPI payment option is not yet enabled will they enable or not. If it is already enabled, pls share the link to access.

@Nakul @mohitmehra still cannot see RE in holdings.

Hi,

I don’t see an option to may payment for rights entitlements. As per the mail I have received from Zerodha, I should be able to pay on kfintech rights issue site. When I visit kfintech site, “Go” button for making payment is greyedout/disabled. Can someone help please?